5 Capabilities Powered by Programmatic Buying

When you think about the real benefits of programmatic buying, you will eventually boil it down to the ease with which highly skilled people can execute digital ad programs. In order to be successful, these marketers use the best data driven practices which enable them to buy highly desirable ad impressions.

Five capabilities powered by programmatic buying:

1. Improved search with programmatic profile data

Let’s say your client wants to market a new Bentley high-end luxury car that just came on the market for $195,000. Using search, you would expect that people searching for Bentleys at that price range would be your potential customer. However, from experience we’ve learned that not every person doing a search for the car is looking to purchase a Bentley. Some people will be dreamers simply looking at cars they someday hope to own. Others may simply be teenagers looking at pictures of Bentleys with no intention to buy. However, you can still benefit from the third-party profile data and cookies that are created from search. Using additional data from a company like Nielsen, you can get detailed audience segments on car ownership, credit, income, age, and other criteria. Other companies collect intelligence about car owners that give detailed audience segments on current car ownership, attitudes, in-market data, and other relevant information that can help guide programmatic buying.

Combining the search campaign data with the third-party profile information can provide higher conversions. While you can get some good marketing data from Google Adwords, more value can be obtained using the data provided for programmatic buying. A good example of how you could benefit from this data would be to lower your bids so the ads don’t show to viewers that are below the target income or age group for this type of car. On the other hand, you could increase your bids for the high potential customers that match all of the requirements.

2. Using large-scale analytics to remove costly underperformers

Given time, you will identify domains that you do not wish to use for specific or even all campaigns. By identifying these domains, you can create a list that will lower the risk of fraud and low-quality media from being part of your programmatic media buys. When you remove most of the potentially poor ranking media sources from your inventory, it can make your campaigns more effective.

Using this monthly process, you can remove the low-quality domains:
Sort all of your domains (top-level domains, websites, and networks) by the amount spent.
Separate the domains that are responsible for 80% of your ad spending.
Resort the list based on key performance indicators like CPC, CPA, and time spent.
Blacklist the bottom 10% to 20% from your future campaigns.

3. Segmenting your audience with relative value measurements

Typically, your audience is segmented based on demographics. Some segments are simply too diverse to target (i.e. soccer moms). One way around this is to use relative value measurements to segment your audience.

Use this process to segment your audience with relative value measurements:
Group your audience based upon age demographics.
Rank the age groups based on the economic value to your brand or product using company data like profits, sales, and overall lifetime value of the customer.
Exclude the lower 20% of the list.
Group the remaining 80% by assigning a value of “average” or “great”.
If you know that the “great” list performs twice as well as your “average” list, you can set up bids and frequency caps based on these calculations.
Reevaluate these groups every week or two based on performance.

4. Identifying hard-to-define segments

When you have a hard-to-define segment, you can use population scoring to give a unique economic value to the members of your target audience. You can then use the economic value score to segment your customers based upon income. Going back to our Bentley example, this will allow you to identify the high-value customers that can afford to buy high-end luxury cars from those that can’t.

5. Use automation wisely

One of the advantages of automation is that it frees up time for media planners to focus on more advanced strategies. Remember that you need to take an active role in making sure your client gets optimum results. Use the time saved with automation to improve programmatic’s ability to granularly target and segment your audiences.

By combining search with programmatic data, you can yield incredible synergistic results. By removing costly underperformers and identifying your segments more effectively, you can improve the capabilities of your programmatic buying.

Andreas is one of Katana's co-founders and serves as the Executive Chairman, where he oversees Katana’s overall strategy. An 18-year digital and advertising veteran, Andreas has built successfully multiple digital marketing businesses, including one of the largest independent digital agencies in the US. He is also the youngest recipient of the Silver Medal Award of the American Advertising Federation, the largest advertising trade association in the World.

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